Decoding the Ethereum Bear Call Spread
A visual guide to a defined-risk option strategy for a bearish market, based on Delta Exchange data.
Live Ethereum Price Action
Monitor real-time Ethereum price movements directly within the infographic.
Market Pulse: Why a Bearish Strategy?
Recent market analysis indicates a prevailing bearish sentiment across various timeframes, suggesting potential downward pressure or consolidation. This outlook makes a Bear Call Spread a suitable strategy.
Short-Term View
Bearish Signals
Mid-Term View
Consolidation
Daily View
Downward Pressure
Long-Term View
Weakening Trend
The Strategy Blueprint: Bear Call Spread
A Bear Call Spread is a bearish, defined-risk option strategy. It involves selling an out-of-the-money (OTM) call option and simultaneously buying a further OTM call option with the same expiry. This strategy profits if the underlying asset's price falls or stays below the sold strike price.
Contract Size: 0.01 ETH per contract
Number of Contracts: 10
Payoff Profile at Expiry
The strategy's success hinges on Ethereum's price staying below the sold strike price at expiration. Here are the key financial outcomes for our 10-contract position.
Maximum Profit
$2 USD
If ETH price is below $3,800
Maximum Loss
$8 USD
If ETH price is above $3,900
Breakeven Point
$3,820
Profit if ETH expires below this point
Trade Management Plan
A successful strategy requires a clear plan for managing the position until expiration.
Intraday Actions
Monitor continuously. Consider exiting if Ethereum's price moves significantly against your position or if bullish momentum increases.
Positional Actions
If the strategy remains profitable, carry it forward. Pay close attention to key resistance levels and overall market sentiment to decide whether to hold or close the position before expiry.
